Neighbourhood Planning Bill

Lord Cameron of Dillington Excerpts

Committee: 3rd sitting (Hansard): House of Lords
Monday 6th February 2017 Grand Committee

[Lord Cameron of Dillington (CB)]

My Lords, I hesitate to intervene. I am not an expert on planning and I have never served on a local planning authority, but I have been involved from the other side, the side of the applicant—not big developments but small developments in villages and so on—so I probably see this slightly differently.

I am on my feet because I cannot quite see why all the conditions and the problems that have been mentioned by noble Lords—drainage, lighting and so on—cannot be dealt with, as the noble Lord, Lord Lansley, suggested, in the pre-decision planning conditions. In other words, in the normal planning agreement, you work with the planning authority to determine under exactly what conditions the planning permission will be granted, but surely Clause 12 is not about planning conditions; it is about a situation when all the conditions have to be implemented before the building starts. That is where the delay seems to be, and the clause seems to me quite reasonable.

I realise that the problem is probably the financing of planning departments, which do not have the resources to deal with all the issues prior to giving or not giving planning permission. To some extent, pre-commencement conditions are added after the council has decided on an application because there may not have been the resources to deal properly with the application before that point. The local planning authority also may not have the resources to check during the building of the development that all the conditions that had originally been agreed to are being met. In other words, the only way in which this can be done simply is to do it pre-commencement, so that applicants have to apply before they can start building. It is a cheap route out of a particular problem.

I am not an expert on planning, as I said, but it seems to me that there is a difference between ordinary planning conditions and pre-commencement planning conditions. As someone who has applied, I know that sometimes pre-commencement planning conditions delay the scheme and can be, as the noble Lord, Lord Lansley, described, an ambush—suddenly new conditions are added after the planning conditions and all the terms have been agreed to. However, I am not sure why all noble Lords’ concerns are so targeted against the pre-commencement conditions.

[Lord Stunell]

My Lords, I would like Clause 12 to be taken out of the Bill. It is unsatisfactory because it is written so broadly. Under subsections (1) and (2), the Secretary of State is in a position to do practically anything as long as it is a prescribed description, but subsection (9) says that,

“‘prescribed’ means prescribed by the Secretary of State”.

So there is no limitation on the Secretary of State’s capacity to change the current planning system, not simply the pre-commencement conditions, although that has been the immediate focus of the debate.

Although the clause is widely drawn, for the Minister it clearly has a much more limited intention. I asked a question to see whether I could establish exactly what that limited intention was. On the face of it, from what the Minister has told us this afternoon, it is intended simply to ensure that the National Planning Policy Framework is the bedrock on which all planning decisions are made; in other words, to make the NPPF in effect a statutory document. If that was his intention, it could have been expressed much more clearly by a clause that would be fundamentally different from Clause 12 and be something we could debate the pros and cons of much more satisfactorily. If, on the other hand, it is intended to inhibit or prevent local authorities imposing conditions that would otherwise be in conformity with the NPPF, he needs to go to greater length to explain why the Government believe the NPPF needs to be trimmed back a bit.

I hope the Minister can see that if the NPPF is the reference, it would be useful if it was referred to in some way in the Bill, particularly in this clause. It is beginning to look as though his letter will be as long as the National Planning Policy Framework, which, incidentally, comes in at 59 pages, two of which are a list of the 44 codes of practice that it supersedes, which themselves were about 1,000 pages long. By the time we have some regulations to say exactly what we mean as a result of Clause 12, we will begin to unravel the NPPF.

There is a fundamental disconnect between what is in the Bill and what the Minister says its intention is. When I saw the Government’s amendments, I thought we were going to see something helpful, but I noticed that five of the amendments in the previous group were to insert the word “relevant” before the phrase “planning conditions”. One wonders a little whether one needed that word added. It is good that it has been, but can we just have the answer to the philosophical intent of the clause relating to planning as a whole and to pre-commencement conditions?

At Second Reading I mentioned that the National Planning Policy Framework—which is now treated as though it had originally been carved in stone at the top of Mount Sinai—had quite a troubled birth, with version one going around the Government for preapproval before it went out to consultation from the Department for Communities and Local Government, in which I was at the time a junior Minister. It came back from the Treasury with red ink all over it. It could not go out until the amendments the Treasury required had been made. Of course, there was uproar when it went public. In particular, the National Trust organised a very vigorous campaign against it. It turned out that the National Trust is the good cause of choice for a large number of Conservative Party members, who proceeded to let their Conservative Members of Parliament know about their dissatisfaction. One way or another, the consultation resulted in a completely different document coming forward, which was very similar to the document that had been drawn up and altered by the Treasury in the first place.

I rather fear that Clause 12 is another NPPF, except that we are at only the middle point, where something quite sensible has been turned into something that is not nearly so sensible and is fundamentally threatening many of the safeguards that the final version of the NPPF established so clearly, in particular the three pillars of sustainability when there is consideration of a planning application. Originally, I thought that the department had had the same experience this time that it had with the NPPF—it had gone off to the Treasury, which had put some red ink on it. But I realise that the current Secretary of State in the Department for Communities and Local Government was in fact the Financial Secretary to the Treasury at the time when the NPPF went on its rounds, so it is possible that the red ink was added at a much earlier stage.

I suggest that the Minister has a quiet word with the Secretary of State to explain to the high proportion of Conservative activists who belong to the National Trust—because he will soon find that out again—how much regard the NPPF has now attracted on all sides as a short, intelligible and easy-to-read planning document, and consider either scrapping Clause 12 completely or introducing a provision stating that local authorities are not permitted to impose conditions which go beyond the National Planning Policy Framework. I would have thought that that would achieve the objective which I think the Minister is seeking. Finally, the Minister should also convey to the Secretary of State the fact that this is a Henry VIII clause that Charles III will be most unhappy about.

--- Later in debate ---

[Lord Cameron of Dillington]

My Lords, I would like to add my voice in support of this amendment and to repeat the point made by the noble Baroness about the comparison of ancient woodlands to, say, a grade 1 listed building. I will take an example local to me, which is Wells Cathedral in the county of Somerset. It is irreplaceable. However much money you have, you cannot replace it. If you destroy it, whatever you put in its place could never be the first English Gothic cathedral built on a Saxon minster. That is the real wonder of Wells, apart from its magnificence and splendour as a building. Similarly, we cannot replace an ancient woodland. Whatever is put in its place, it will never be a pre-industrial 500 year-old to 10,000 year-old woodland with all the naturally developed species and habitats that tell the tale of the specific centuries it has lived through. Even if a newly planted woodland were to survive for 500 years in this fast-moving world, it could never be the same as one which may never have been planted at all, but just emerged from the residue of the last Ice Age or the wastelands of a Viking, Saxon or Norman wilderness. Such woodlands are irreplaceable and this amendment needs to be supported.

[The Duke of Somerset (CB)]

My Lords, I understand that Amendment 46 is not central to the thrust of the Bill but it will definitely improve it, although perhaps as a bit of a side issue. The amendment seeks to do more than just preserve ancient trees, of which we have heard so much about and which are extremely important; in subsection (1)(d) it also provides for new plantings. The need for trees on development sites is extensive in order to improve the otherwise sterile environment that is often found on a new estate.

Trees improve the townscape by breaking up angular building forms. They bring colour in season, they screen unsightly views and enrich biodiversity and habitats. They benefit insects, birds and mammals, and provide a source of nectar for bees which are currently under much pressure from chemicals. They also provide berries for wildlife. Trees conserve energy by providing shelter and shade from the wind and the sun. They absorb pollution and particulates and thus improve air quality, which is an increasing urban problem leading to ill health and sometimes death. Trees can provide educational tools for schools in order to develop environmental awareness and conservation skills. The list of benefits is long and worthy—from the abstract by reducing human stress, to the practical by absorbing and mitigating the risks of flooding and erosion, as we have heard.

However, trees have to be managed and there are health and safety aspects to be addressed. For example, branches can sometimes shed without warning, but these are not too difficult to manage. If we had more trees, children might even rediscover the joys of climbing them and they might learn to respect and not to vandalise their own communities by damaging the young plants. This alone can foster strength in communities and reconnection with neighbours.

If carried, this amendment would add greatly to the Bill in an inexpensive and non-critical way. I commend it to the Committee.

Neighbourhood Planning Bill

Lord Cameron of Dillington Excerpts

Committee: 2nd sitting (Hansard): House of Lords
Thursday 2nd February 2017 Grand Committee

Moved by

[Lord Cameron of Dillington]

25: After Clause 11, insert the following new Clause—
“Right to reject a second development application
A local planning authority has the right to reject a planning application if the applicant, or any associated individual or body, already has planning permission to build 50 or more homes in the area.”

[Lord Cameron of Dillington]

My Lords, first, I should say that I tabled this very much as a probing amendment. We all agree that we desperately need more houses for the next generation, and the Bill attempts to loosen the planning system so that we get more permissions to build more homes via improved neighbourhood plans and curtailing the possibility of delays caused by overprotectionist pre-commencement conditions. So far so good, but improving the planning system will not necessarily result in more homes being built. We need some sort of incentive or leverage to make the builders build.

In this context, two bits in the early evidence sessions in the Commons interested me. One was a question from Kit Malthouse MP to Hugh Ellis of the TCPA. He asked:

“On that point, is it possible for a developer to obtain a large permission in an area, and then not develop it out, and then challenge a refusal on another site in that area on the basis that a five-year land supply has not been fulfilled?


Hugh Ellis replied, “yes” and Kit Malthouse went on to spell it out:

“Therefore, by being patient, they are able to blow a hole in the land supply and get a permission that they otherwise would not have done, and double up”.—[Official Report, Commons, Neighbourhood Planning Bill Committee, 18/10/16; col. 32.]


That merely confirmed what other people had been telling me for some years. It was that short conversation that led me to table this amendment as a possible solution. It is not necessarily the only solution. It is worded in such a way that the initiative remains firmly in the hands of the local planning authority. It does not have to refuse a second application from a developer or builder, but it is to be hoped that if there is any hint that the developer is playing speculative games, the local planning authority should have the incontestable right to refuse him or her permission, however suitable the second site may be. I use the word “incontestable” advisedly, the point being that local planning authorities have a duty to fulfil their five-year land supply, which is as it should be, but they need more tools in their toolbox than the current planning system gives them.

To take an alternative approach, a little later in that evidence session there was another conversation between Hugh Ellis and the Minister, Gavin Barwell. Hugh Ellis said:

“You have signalled, Minister, that you are interested in exploring how we can find new ways to challenge that”.


He is referring to the gap between planning permissions granted and houses being built.

“The critical issue is that from 2019-20 onwards, the private sector will probably go on building 150,000 homes a year, almost for ever”.


A little later, the Local Government Association representative added to the conversation:

“I will finish with an example from Croydon. If a planning permission has not been taken up within three years, perhaps a council building company … should be invited to step in and start building the homes that somebody promised they would build but did not”.—[Official Report, Commons, Neighbourhood Planning Bill Committee, 18/10/16; cols. 37-38.]


So there is another possible solution to the problem: giving local councils permission to build out an undeveloped site. An alternative could be for the local planning authority to divide the land up into smaller plots and sell them off to other builders who can guarantee to build them out within a given period of time. There was an article in the Times today which hinted at that as a solution.

Something has to be done. This amendment is entirely probing: to test the Government’s enthusiasm on this issue. There is no doubt in my mind that we cannot go on having national, local and neighbourhood plans for housing continually undermined by developers who do not develop. I expect that the Minister will tell me that all this will be in the housing White Paper, but I like to hope that he can give us some indication of government thinking in this area. I beg to move.

[Baroness Pinnock (LD)]

I am speaking on behalf of my noble friend Lady Bakewell of Hardington Mandeville, who is indisposed and has had to leave. I draw attention to my interests as set out in the register. I am another vice-president of the Local Government Association and a councillor in the Metropolitan Borough of Kirklees.

My noble friend wanted to say that, while some developers submit planning applications and build the homes for which they have been given permission, not all of them do so. It is not unusual for developers to gain permission but not to start work on site or, if they do, for the work to be at a low level and for the site then to be abandoned. This does not help the housing crisis that the country is currently undergoing. Local planning authorities and councillors believe that there are sufficient planning permissions to cover local housing needs, but they are thwarted when homes are not built in a timely fashion. There is currently little that they can do to encourage a developer to start and finish. The amendment moved by the noble Lord, Lord Cameron, would encourage tardier developers to take seriously the permissions they already hold and to build to meet the need. It is not intended to penalise the smaller developer who may be having problems financing his work but is aimed at those who have permissions for 50 homes or more, and who could make a real difference to the housing shortage by realising that these homes matter.

I turn now to Amendment 63. We have all seen sites around the country that have received full planning permission and where a digger has been on site and excavated a drainage ditch, then the driver has packed up and gone home. Often the digger is left on site. Perhaps metal barricades will be erected around the ditch, but nothing else happens. These sites can often be left for years before anything further is done. There is a notorious site in my area which was 40 years in development. As noble Lords can imagine, many things have changed in that time, such as the road network and all sorts of other things. It is a real issue that needs to be addressed. The country is suffering a housing crisis, and has been for many years. This will not improve unless we get developers moving to fulfil their obligations to build with the permissions they hold.

Encouragement does not appear to have worked in the past, so we must turn to sanctions. In my amendment I have not specified what “a reasonable time” for completion might be or what the financial penalties should be. I believe that these are best left to be determined by the size of the site and the number of homes not completed in an orderly fashion. The amendment appears to be all stick and no carrot, but I regret that the country has reached the stage where homes need to be built, and developers have to play their part in making that happen. I look forward to the Minister’s response.

--- Later in debate ---

As I have indicated, I have fundamental concerns with this amendment in view of the fact—noble Lords rightly anticipated that I would again say this—that this matter will be addressed in the housing White Paper. It needs a fuller discussion and the housing White Paper is expected very shortly. I suggest that this is not the appropriate vehicle for this issue: it needs a deeper dive and a longer look. In response to a fair speech from the noble Lord, Lord Beecham, I can confirm that the Government see this as a concern and are looking at ways to address it. With that, I ask the noble Lord, Lord Cameron, and the noble Baroness, Lady Pinnock, who so ably spoke to their amendments, to withdraw or not move them on this occasion.

[Lord Cameron of Dillington]

I am grateful to all noble Lords who have taken part in the debate. As I said in opening, the amendment was seeking to provoke the Government on whether they were addressing the problem from our perspective. I am glad to hear the Minister say that the Government are working on the problem and that it will be looked at seriously within the housing White Paper. As I said at the beginning of my speech, I know this is not the right amendment. It is only a provocative amendment to get some form of response from the Government, so I am happy to withdraw it.

Amendment 25 withdrawn.

Neighbourhood Planning Bill

Lord Cameron of Dillington Excerpts

Committee: 1st sitting (Hansard): House of Lords
Tuesday 31st January 2017 Grand Committee

[Lord Shipley]

My Lords, I express my support for the amendments in the name of the noble Baroness, Lady Cumberlege, but I want to speak in particular to Amendments 9, 10 and 11. They are important because once again they are about the definition of words. We discussed earlier the meaning of “modification” and “material”, and now we have to define “significant”, “substantial” and “exceptional”. The noble Baroness, Lady Cumberlege, has drawn our attention to the fact that these words can be interpreted in different ways.

First, paragraph 12(1) of new Schedule A2 refers to the “general rule”. If a rule is a general rule, it means that sometimes it is not. I think a rule needs to be rule. The elimination of the word “general”, which leads to doubt, seems the right thing to do. I hope the Minister will take the point that that word should be removed. Looking very closely at the Bill, paragraph 10(1) of the new schedule says that it is for the examiner to,

“determine whether the modifications contained in the draft plan are so significant or substantial as to change the nature of the neighbourhood development plan which the draft plan would replace”.

There we have the introduction of the words “significant” and “substantial”. However, it is then left with the examiner to proceed by the written representation route. So a substantial or a significant change is to be dealt with by the written route and, in paragraph 12(2), only the examiner can,

“cause a hearing to be held for the purpose of receiving oral representations … in any case where the examiner”—

but not anybody else—

“considers that there are exceptional reasons for doing so”.

So there are substantial and significant changes but unless the examiner thinks they are exceptional, there cannot be a formal hearing.

We need to get this right. I foresee a lot of trouble arising if those who have taken part in developing a neighbourhood plan are suddenly told that a substantial or significant change to it can be dealt with only by the written procedure, whereas they may have things that they wish to say and to be heard. If the process is to be sound, we should be encouraging more oral hearings where people can listen to the evidence and contribute to the discussion. I hope the Minister will take on board that these definitions really matter. Something that is significant or substantial should have an oral hearing; something less important than significant or substantial could have written representations. But simply to say that it must be exceptional in the eyes of the examiner does not seem right.

[Lord Cameron of Dillington (CB)]

My Lords, I support Amendments 6A and 6B. For the purposes of this Committee, I declare an interest as a farmer and landowner. Both amendments are about ensuring that the procedure governing an examiner’s report on a neighbourhood plan allows the neighbourhood to meet him halfway, as it were, or allows him to make helpful compromise amendments rather than full-scale deletions, which I gather is all too often the case.

As has been said frequently today, planning is a very complicated subject for the average lay man—that very definitely includes me. The noble Lord, Lord Horam, said that he was not a planning expert. If he is not a planning expert, I am a babe in arms. I have heard planning described as a minefield covered in a mist. In spite of this, villages, communities and neighbourhoods work really hard to master this misty minefield and over a long period of time—two years, five years, whatever it might be—they try to get to grips with the complications of the planning system, not to mention the complications of the diverse needs of their community and the divergent local views on how it should be developed, in line, of course, with the local plan and the NPPF. That point has been made several times and I thoroughly endorse it.

Neighbourhood Planning Bill

Lord Cameron of Dillington Excerpts

2nd reading (Hansard): House of Lords
Tuesday 17th January 2017 Lords Chamber

[Lord Cameron of Dillington (CB)]

My Lords, first, I must declare an interest as a farmer and landowner. Everyone is agreed on the fact that we need more houses: the Government, opposition parties, local authorities, virtually every NGO in the country and, of course, anyone looking to get married or start a family. For decades we have not built enough homes in this country, and this has had devastating consequences for the new generation of homemakers, both renters and potential owners. The Secretary of State has a target of 220,000 new homes per year—that is, new homes built and not just given planning permission—but other forecasters have said the figure needs to be as high as 330,000 to cater for the number of households likely to be created between now and 2039. Last year, the figure for new houses built was only some 164,000. That was the highest for four years, so we have a good way to go. In the mid-1950s, we managed to build 350,000 homes per annum, but there were 32 new towns as part of that programme, which is why what I hope is our growing garden village programme will be so important.

However, I have noticed that, in spite of the general consensus about the urgent need for new homes, there is always a tendency within every group, in every locality and among even MPs in their debates to say, yes, but we must make an exception for this valley, this village, this reason et cetera. I hope we do not have an outbreak of “yes buts” among your Lordships, and I hope every amendment will be looked at in terms of whether it will reduce or increase the number of homes available to the young of today. That will be the all-important test.

We need to plan for more homes and ensure that they get built. Do we need an amendment which bars a housebuilder with permission for, say, 50 or more housing units in a planning authority area applying for more until he has the first site well under way? There is no doubt that something needs to be done to get the country actually building, but it does not all depend on the planning system. We also need to build to a high specification, particularly as regards heat retention, and with a whole variety of tenures, from freehold through shared equity to affordable lets.

A long time ago, when I was chair of the Countryside Agency travelling the country to promote more affordable housing, the biggest opposition always came from the town or village itself. So I came to the Bill with an inherent suspicion of neighbourhood plans, but it seems that such is the new recognition of the need for more homes—the Minister referred to this—that my suspicions are unjustified. The secret is the neighbourhood getting the right advice, and the plan conforming with the strategy of the local plan—if there is a local plan, that is, and I welcome the efforts of the Government to ensure we get 100% coverage by local plans. Then it seems that we get more homes delivered more quickly.

It is vital that a neighbourhood can get the right advice paid for from the start, and that that advice includes not only all the legal and planning advice but, importantly, a facilitator for the vision and place-making advice. At the Countryside Agency, we had a scheme whereby we tried to encourage market towns to become hubs for their surrounding countryside and to have a vision for what they could become if they worked to create an attractive community. It was marvellous watching the scales fall from the eyes of potential movers and shakers as they suddenly realised what could be done to turn impoverished backwaters into really attractive communities with a real sense of purpose—and when I say attractive communities, I mean communities that attracted people who wanted to live there, businesses that wanted to move there or start there, and money that wanted to spend there. I have seen towns transformed by the efforts of a few visionaries, and it is that sort of visionary facilitator that every village and every community needs. A neighbourhood needs to be inspired into thinking about its future and saying, “Maybe if we get some more houses we can get a shop, a pub and a health centre, create more jobs, hold an arts festival or a summer food festival or the like”, et cetera. That sort of advice and inspiration is just as important as the legal planning advice, if not more so.

However, neighbourhood plans and local plans all cost money, sometimes considerable amounts of money, and society needs to pay for them. We need well-funded planning departments but, as we know, local authority spending on planning has almost halved in recent years. Although some of the big housebuilders are happy to pay higher planning fees to get a faster service, this does not necessarily apply to the smaller landowners and developers, who already find it difficult to pay the tens and sometimes hundreds of thousands of pounds for all the reports and hoops they have to go through to get their planning permission. Meanwhile, developing local and neighbourhood plans does not bring in any fees, and if you live in a county of low development—such as Cumbria or Cornwall, to name but two—then you do not have many development fees to contribute towards your plan-making. We should bear in mind that the planning system is largely there for the benefit of society at large, to both protect it and to plan for its future, so it is only right that the taxpayer should largely pay for local and neighbourhood plans.

We need a government statement on the financing of local planning departments, so that they can afford to ensure that a potential developer knows he will have a constant expert to deal with who does not get moved on, who is not attracted into the private sector, who has actually read the many expensive reports the developer has had to produce and who can give the right advice to enable more houses to be built in the right place, and as soon as possible.

Moving on to another issue connected to well-resourced planning departments, I am convinced that Clause 12 on pre-commencement planning conditions is necessary only because the lack of resources prevents the department from sorting out all the terms of agreement prior to the permission being granted within the necessary timeframe. I have already mentioned the sometimes hundreds of thousands of pounds necessary to get planning permission on a complicated site, and I agree with the Government that to have new conditions applied after the decision has been made is not in the interests of either social or economic development. Nor does it pass the Cameron test—mine—of enabling more houses to be built sooner. So, provided that we also have well-resourced planning departments to make pre-commencement conditions largely unnecessary, I support Clause 12.

Part 2 is a good first attempt at tidying up the very complicated compulsory purchase regime, which has yet to catch up with our nation’s need for large and small project development that does not take an age to deliver. I firmly believe that the length of time involved in compulsory purchases, along with a whole host of unnecessary objections to schemes by anyone remotely affected, costs the Treasury and the nation far more money in delays than if it was to offer a premium for speedy acquiescence to the project involved. This area needs a really good examination, with examples taken from other countries: the USA, for instance, where 81% of land value compensation assessments are agreed immediately, or France, where an enhanced compensation scheme enables transport projects to be brought to fruition swiftly. We need a scheme where, if possible, the purchasing body is empowered to do a normal sale and contract deal with the owner before resorting to compulsory powers, with all the complications and delays that that involves. This deal would inevitably involve an overage clause or a premium for hope value if there was any prospect of development on the site over the subsequent 20 years or so. That would be quite normal in the private sector, and it must only be fair to have it where there is compulsion involved. As I say, Part 2 is a good start towards simplification and reform, but I am certain that we need a more in-depth review and a complete overhaul of our compulsory purchase regime if we are to achieve the speed of progress and development that we need in a post-Brexit UK.

I look forward to assisting with the progress of the Bill over the coming months.

Energy Bill [HL]

Lord Cameron of Dillington Excerpts

Monday 14th September 2015 Lords Chamber

[Lord Cameron of Dillington (CB)]

My Lords, I support this group of amendments. I was not sure whether I would speak to this group or in support of the clause stand part Motion in the next group. I want to make a small but vital point and endorse the point touched on by others about the need for government consistency and clarity as soon as possible.

First, I declare an interest as a farmer and landowner, and also as a trustee of a trust in Scotland that has renewable investments, although no wind farms are involved. I also declare myself someone who would like to see the proper and ordered development of our renewable capabilities in this country.

It seems to me that it does not matter whether you are for or against wind farms, onshore or offshore—like the Government, you may prefer the more expensive and, to my mind, much more risky offshore wind. The point is that if a Conservative Minister can say in January that your investments are safe and that no changes in the rules are proposed, but then six months later the rules have changed, that undermines not only energy investment in this country but all investment. It makes banks run a mile. Say the Treasury had made promises to a car manufacturer to invest in northern England, and the investor spent millions preparing for the project on marketing exercises, planning and costings—I know from my own experience that preparing a project can often account for as much as a quarter of the total cost of a project. What if then the Treasury went and pulled the rug out and changed the rules? There would be a universal outcry—similar to that if a referee changed the rules in the middle of a game of football. To some extent, this is a game—an international game of investment. If we are going to compete economically, we must continue to be seen as a reliable country in which long-term investments are safe.

I admit that the Government’s manifesto commitment on land-based wind farms introduces a mitigating factor, but as the noble and learned Lord, Lord Wallace, pointed out earlier, it is only a peripheral factor to this clause, which is why I am speaking in favour of this group of amendments rather than in the stand part debate. But we must get a firm investment background sooner rather than later, and these amendments bring a degree of consistency back to the table. None the less, it would have been better if the Government had produced their own paper on grace periods, as they promised to do before Committee.

Even if we agree the government proposals on grace periods next month, that may be too late for some projects even if they are eligible at that stage. The trouble is that they are dependent on banks and credit, and banks are naturally cautious and, in my experience, inordinately slow about getting their processes and procedures in place, and even about producing the money. It could be months before these eligible projects get the go-ahead to proceed or to reproceed with their investment.

I will not say any more, but we really must get the rules fixed as soon as possible and then stick to them. That also applies to the basic ground rules for CFDs in the future. Bearing in mind that it takes at least five years to prepare for these projects, bankers and other investors must know with certainty where they stand as opposed to the state of limbo the Government have left them in at the moment. I hope that the Government will be able to respond positively to these amendments and give us some hint of exactly when we are going to hear what their views are.

Energy Bill [HL]

Lord Cameron of Dillington Excerpts

Wednesday 22nd July 2015 Lords Chamber

[Lord Cameron of Dillington (CB)]

My Lords, I want to talk only about Part 4 of the Bill. First, I must declare an interest as a farmer in Somerset who has invested in solar PV. However, I reassure the House that, having done my bit, I have no plans for projects, either in solar or wind, so personally have nothing to lose or gain from the Bill or from any other imminent changes to support for renewables.

I am enthusiastic about renewable energy and believe that if we as a nation can kick-start the various renewable technologies, including battery power, by supporting them through their early stages, we will undoubtedly produce at least one or two viable industries that will in future be able to stand on their own feet and bring us big rewards. I might add that it is not only the new renewables that need government support these days. Fresh-start gas and coal-fired power stations still need government financing, and of course nuclear fission is probably proving to be the most expensive of all forms of electricity generation—although in the long run it might be offshore wind that takes that particular biscuit, or even in the short run if salt and sea storms take their likely toll.

However, I also support the government principle, inherent in Part 4, that we should gradually withdraw or at least reduce the subsidy for new technologies in recognition of the fact that mass production, better science and better engineering gradually combine to reduce the costs of production. Although there is still a long way to go in cost saving per output with solar PV, which in my view could produce the cheapest form of electricity we will have in 10 years, the cost curve of onshore wind turbine generation is now flattening and is unlikely to see any major reduction in costs per kilowatt in the future.

With all that in mind, your Lordships might expect me to be a firm supporter of Part 4—or at least of those clauses covering the planned changes from renewable obligations to contracts for difference. However, as with other noble Lords, I can sum up what I want to say by citing the then Energy Minister in the other place when he said, only last January, that the renewables obligation would remain open until March 2017. As it happens, in the same month, the then Energy Minister in this House said:

“No further comprehensive banding review is planned for the RO scheme”.

I realise at this stage of the debate I am repeating what other noble Lords have said, but we absolutely must maintain consistency in our approach to renewables. If we are to meet our targets, our generators, whose investments in projects can take up to 10 years from start to finish, must know where they stand. More importantly their investors, and particularly those small generators who are dependent on bank loans, must all know where they stand.

By these sudden and unexpected changes in policy—and there was another one this morning—the Government have made banks and investors nervous. It applies across the whole renewables sector because, as we heard this morning, going back on promises made on wind can also apply to solar and maybe other technologies. It goes without saying that the uncertainty filters back to the engineers and manufacturers responsible for producing the equipment for these technologies, and they have to invest for up to a 20-year horizon. We must have consistency.

Now as I understand it, as far as wind is concerned the Government have recognised the problem and are trying hard to accommodate projects that have had quite considerable investment but have been put on ice by the sudden change in policy. They are trying to help with the so-called grace periods or exceptions to the change in the rules. However, the problem lies in the details in the Bill: there are no details in the Bill. While that remains the case, the banks and other investors have paused investment and lending and will not resume until they see what the Government are offering—really offering for certain, because there is uncertainty everywhere here now. What politicians say in Parliament clearly has little validity any more in this field. I think banks are probably aware of the concept of one Parliament not being able to control its successor.

If the Government are going to wait until the passage of the Bill before publishing the exact details of the grace periods, these projects are likely to miss not only the March 2016 deadline but possibly the March 2017 deadline, if they indeed qualify. There is a lot of money involved here—money which has been invested as a result of government promises. Therefore, before the Bill comes to Committee in this House, we must have the necessary detail of these grace periods well and truly embedded in Part 4. Indeed, if this morning’s announcement on solar PV is anything to go by, Part 4 may need to be rewritten in entirety.